Property · Insurance Term
Margin Clause
Definition
A margin clause is a provision in a blanket property policy that caps payment for any one building at a set percentage of the value you reported for it, such as 110% or 125%. It limits how much of a shared blanket limit a single building can use.
In Plain English
A blanket limit lets one total limit cover several buildings. That flexibility helps if one building's value was set too low. A margin clause pulls some of that flexibility back by tying each building's maximum payment to the value on your statement of values.
For example, with a 110% margin clause, a building reported at $1,000,000 can recover no more than $1,100,000, even if the blanket limit is $10,000,000. If the true rebuilding cost was $1,500,000, the owner would absorb the rest.
That makes accurate values critical. Margin clauses commonly appear when insurers see values that look low. A policy with a scheduled limit per building or one with agreed value works differently, so ask how your policy is built.
Not sure how your policy handles this? Have us review it, or get a quote.
Example
Hypothetical: a portfolio has a $12,000,000 blanket limit with a 125% margin clause. One building was reported at $800,000. After a fire, the payment for that building is capped at $1,000,000 (125% of $800,000), even if rebuilding costs $1,300,000.
What to Watch For
- Ask whether your blanket policy has a margin clause and what percentage applies.
- Update reported values for every building, not just the total.
- Pay special attention to older buildings, where values are often outdated.
- Ask whether a higher margin percentage or a different structure is available.
Last updated October 14, 2026 · Primesure editorial team · How We Write